The Waugh Zone October 27 2015

This morning's Waugh Zone is edited by Ned Simons. Paul is away, which is, frankly, causing a constitutional crisis of its own

1) SI-ONARA TAX CREDIT CUTS?

David Cameron has declared war on the House of Lords after peers decided to vote down his government's plans to cut tax credits. A "rapid review" of the powers held by the upper chamber is underway.

The Lords backed a Labour bid to delay the introduction of the changes. George Osborne has been told by peers to set out a three-year package of transitional financial help for the people affected. The mitigation will be announced in the Autumn Statement at the end of November.

The chancellor, who yesterday was in "listening mode", upgraded to "crisis mode" immediately following the vote. "Labour and Liberal Lords, who are not elected, have voted against measures in a Conservative Budget, that raises constitutional issues," he said. No.10 piled in: "The prime minister is determined we will address this constitutional issue. A convention has been broken." On Newsnight, Conservative constitutionalist-in-chief Jacob Rees-Mogg encouraged Cameron to flood the Lords with Tory peers to stop the left-wing majority in the chamber from blocking further controversial measures.

Speaking on the Today programme this morning, the leader of the Commons, Chris Grayling, said "there will have to be change" to the relationship between the Commons and the Lords. He accused Labour and the Lib Dems of breaking convention because they were "unhappy" at losing the election.

But senior Tory backbencher David Davis said it was a “ridiculous threat" to pack the Lords with lots more Tory peers. And that the public would be "disgusted" by it.

During the debate, Cameron was accused of telling "a lie to win the general election" by one Labour peer. The Bishop of Portsmouth said the changes were "morally indefensible". My colleagues Graeme Demianyk and Owen Bennett were watching, this is their report.

So close was the vote expected to be, the government pulled in Lords from all over the world. Tory Whips even managed to persuade Andrew Lloyd Webber to fly back to Westminster from New York. But it was not enough to avoid a defeat.

Conservatives are furious at the unelected Lords for knocking back a financial matter approved by the elected Commons. But their critics point out the chancellor could have avoided the showdown if he had put the cuts in a finance bill (which peers would not touch) rather than via a Statutory Instrument (SI), which they can. LabourList's Conor Pope wins the best joke paying tribute to the Labour peer who led the defeat: "I hope Baroness Hollis, in the Upper Chamber, with the statutory instrument are added to the next edition of Cluedo."

Helpfully, today is Treasury questions in the Commons. Which means Osborne will have an opportunity to tell us what he is going to do now.

2) TAMPON TAX NOT AXED

An unlikely alliance of feminists and Tory eurosceptics almost conspired to deliver a second defeat to the government last night - over the issue of VAT on tampons and sanitary towels. However a pledge by ministers to lobby the EU to allow VAT on the products to be eliminated managed to persuade enough Conservative backbenches to side with the government.

Currently, tampons have a 5% VAT levy. Labour reduced it to that level, but EU rules prevented it being dropped any further.

Before all the tax credit excitement yesterday, there was one notable addition to the Lords. The Bishop of Gloucester, Rachel Treweek, became the first female Bishop to take a seat on the red benches. Peers applauded as she sat down, which in parliament is extremely rare. HuffPost's Aubrey Allegretti captured the moment, you can watch it here.

According to this morning's Sun, David Cameron may rebrand Britain's relationship with the EU as "associate membership" as part of a strategy to prove dramatic changes have been made. Such a move is unlikely to impress eurosceptic Tory backbenchers however, who will only be satisfied, if at all, by concrete differences. Rebadging the thing probably will not be enough to prevent a split in the party. Daniel Hannan, a Tory MEP and avowed 'Outer', dismissed the idea as "sheer cynicism".

5) MOANING ABOUT ROAMING

Speaking of Europe, the Daily Telegraph reports Ukip MEPs are preparing to help vote down plans in Brussels that would end roaming charges for mobile phones across the EU. That might seem counterintuitive, but as the newspaper notes, the scrapping of charges would enable David Cameron to show how Britain can have real influence in Europe. Ukip MEP Roger Helmer says the move would increase the power of the European Commision so should be opposed on principle.

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